EXHIBIT 3.1

                            Restated

                    Articles of Incorporation

                               of

               Environmental Tectonics Corporation

                         *      *      *

     1.   The name of the corporation is:

          Environmental Tectonics Corporation

     2.   The location and post office address of its registered
office in the Commonwealth of Pennsylvania is:

          C/O Blank, Rome, Klaus & Comisky
          Four Penn Center Plaza
          Philadelphia, Pennsylvania  19103

     3.   The purposes for which the corporation is incorporated
are to have unlimited power to engage in and to do any lawful act
concerning any or all lawful business for which corporations may
be incorporated under the Business Corporation Law of the
Commonwealth of Pennsylvania, including without limitation to
manufacture, process, own, use and deal in and with personal
property of every class and description; to engage in research
and development to furnish services; to acquire, own, use and
dispose of real property of any nature whatsoever and to design,
develop, produce, manufacture and dispose of environmental,
electronic and other systems, equipment and products.

     4.   The corporation is incorporated under the provisions of
the Business Corporation Law of the Commonwealth of Pennsylvania.

     5.   The term for which the corporation is to exist is
perpetual.

     6.   The aggregate number of shares which the corporation
shall have authority to issue is 1,500,000 shares of common
stock, par value $.10 per share.

     7.   The shareholders of the corporation shall not be
entitled to vote cumulatively for the election of directors.

     Executed this 24 day of August 1971.

     Filed in the Department of State on August 27, 1971.

<PAGE>
                  COMMONWEALTH OF PENNSYLVANIA
                       DEPARTMENT OF STATE
                       CORPORATION BUREAU

           Statement of Change of Registered Office --
                  Domestic Business Corporation


     In compliance with the requirements of section 307 of the
Business Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S.
Section 1307) the undersigned corporation, desiring to effect a change
in registered office, does hereby certify that:

     1.   The name of the corporation is:

               ENVIRONMENTAL TECTONICS CORPORATION

     2.   The address of its present registered office in this
Commonwealth is (the Department of State is hereby authorized to
correct the following statement to conform to the records of the
Department):

               c/o Blank, Rome, Klaus & Comisky
               Four Penn Center Plaza
               Philadelphia, Pennsylvania  19103

     3.   The address to which the registered office in this
Commonwealth is to be changed is:

               James Way
               County Line Industrial Park
               Southampton, Pennsylvania  18966

     4.   Such change was authorized by resolution duly adopted
by at least a majority of the members of the board of directors
of the corporation.

     IN TESTIMONY WHEREOF, the undersigned corporation has caused
this statement to be signed by a duly authorized officer, and its
corporate seal, duly attested by another such officer, to be
hereunto affixed, this 24th day of July, 1984.

<PAGE>
                  COMMONWEALTH OF PENNSYLVANIA
                       DEPARTMENT OF STATE
                       CORPORATION BUREAU

                    Articles of Amendment --
                  Domestic Business Corporation


     In compliance with the requirements of section 806 of the
Business Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S.
Section 1806) the undersigned corporation, desiring to amend its
Articles, does hereby certify that:

     1.   The name of the corporation is:

               ENVIRONMENTAL TECTONICS CORPORATION

     2.   The location of its registered office in this
Commonwealth is (the Department of State is hereby authorized to
correct the following statement to conform to the records of the
Department):

               James Way
               County Line Industrial Park
               Southampton, Pennsylvania  18966

     3.   The statute by or under which it was incorporated is: 
The Act of May 5, 1933, P.L. 364.

     4.   The date of its incorporation is:  August 11, 1969.

     5.   (Check, and if appropriate, complete one of the
following):

          [X]  The meeting of the shareholders of the corporation
               at which the amendment was adopted was held at the
               time and place and pursuant to the kind and period
               of notice herein stated.

               Time:     The 18th day of April, 1985.

               Place:    Company Offices, James Way, County Line
                         Industrial Park, Southampton, PA

               Kind and period of notice:  29 days written notice

          [  ] The amendment was adopted by a consent in writing,
               setting forth the action so taken, signed by all
               of the shareholders entitled to vote thereon and
               filed with the Secretary of the corporation.

     6.   At the time of the action of shareholders:

          (a)  The total number of shares outstanding was: 
               1,363,869 shares of Common Stock.

          (b)  The number of shares entitled to vote was: 
               909,307 shares of Common Stock, being all of the
               shares outstanding on the record date, March 11,
               1985.

     7.   In the action taken by the shareholders.

          (a)  The number of shares voted in favor of the
               amendment was:

               774,034 shares

          (b)  The number of shares voted against the amendment
               was:

               7,992 shares

     8.   The amendment adopted by the shareholders, set forth in
full, is as follows:

          "RESOLVED, that Paragraph 6 of the Articles of
     Incorporation of Environmental Tectonics Corporation be and
     hereby is amended to read as follows:

               '6.  The aggregate number of shares
          which the corporation shall have authority to
          issue is 10,000,000 shares of common stock,
          par value $.10 per share.'"

     IN TESTIMONY WHEREOF, the undersigned corporation has caused
these Articles of Amendment to be signed by a duly authorized
officer, and its corporate seal, duly attested by another such
officer, to be hereunto affixed, this 24th day of April, 1985.

<PAGE>
 STATEMENT WITH RESPECT TO SHARES-DOMESTIC BUSINESS CORPORATION

     In connection with the requirements of 15 Pa.C.S.
Section 1522(b) (relating to statement with respect to shares),
the undersigned corporation, desiring to state the designation
and voting rights, preferences, limitations, and special rights,
if any, of a class or series of its shares, hereby states that:

1.   The name of the corporation is:  Environmental Tectonics
     Corporation.

2.   (Check and complete one of the following):

     ___  The resolution amending the Articles under 15 Pa.C.S.
          Section 1522(b) (relating to divisions and
          determinations by the board), set forth in full, is as
          follows:

      X   The resolution amending the Articles under 15 Pa.C.S.
          Section 1522(b) is set forth in full in Exhibit A
          attached hereto and made a part hereof.

3.   The aggregate number of shares of such class or series
     established and designated by (a) such resolution, (b) all
     prior statements, if any, filed under 15 Pa.C.S.
     Section 1522 or corresponding provisions of prior law with
     respect thereto, and (c) any other provision of the Articles
     is 25,000 shares.

4.   The resolution was adopted by the Board of Directors or an
     authorized committee thereof on:  March 26, 1997.

5.   (Check, and if appropriate complete, one of the following):

      X   The resolution shall be effective upon the filing this
          statement with respect to shares in the Department of
          State.

     ___  The resolution shall be effective on:  ________________
          (Date) at _____________________________ (Hour)

     IN TESTIMONY WHEREOF, the undersigned corporation has caused
this statement to be signed by a duly authorized officer thereof
this 27th day of March, 1997.

<PAGE>
                                                  EXHIBIT A


                STATEMENT WITH RESPECT TO SHARES

                               OF

               ENVIRONMENTAL TECTONICS CORPORATION

     RESOLVED, that pursuant to the powers expressly delegated to
the Board of Directors by Article 4 of the Articles of
Incorporation of the Company, the Company hereby establishes and
designates one series of preferred stock and fixes and determines
as set forth herein the relative rights and preferences thereof
as follows:  

          Designation.   There shall be established a series of
preferred stock, which shall consist of 25,000 shares of the
authorized preferred stock and shall be designated Series A
Convertible Preferred Stock (herein referred to as the "Preferred
Stock"). 

          Dividends.

          (a)  The holders of Preferred Stock shall be entitled
to receive dividends (the "Preferred Dividend") at the rate of
$11.00 per share per annum (as adjusted for any stock dividends,
combinations, or splits with respect to such shares) on a
cumulative basis from the actual date of original issue of each
share of Preferred Stock (the "Original Issue Date"), whether or
not declared, payable out of funds legally available therefor, on
the first day of each February, May, August, and November in each
year (each a "Dividend Payment Date").  Payments shall commence
on the first such date to occur after the Original Issue Date, to
the holders of record of the Preferred Stock on the fifteenth day
of the month preceding each Dividend Payment Date, in the amount
of $2.75 per share on each Dividend Payment Date, and payable in
the event of a liquidation, dissolution or winding up of the
Company (whether voluntary or involuntary) or upon conversion of
the Preferred Stock as provided in Section 5 and Section 7(a)
hereof.

          (b)  No dividends (other than those payable solely in
the Common Stock of the Company) shall be paid on any Common
Stock of the Company during any fiscal year of the Company until
dividends in the amount of $11.00 per share of the Preferred
Stock (as adjusted for any stock dividends, combinations or
splits with respect to such shares) shall have been paid, or
declared and set apart during that fiscal year and for any prior
year in which dividends have accumulated but remain unpaid.

          (c)  In the event that either (i) the Company fails to
pay the Preferred Dividend on six (6) consecutive Dividend
Payment Dates, or (ii) the aggregate amount of all accumulated
but unpaid dividends shall equal or exceed the amount of $16.50
per share of Preferred Stock, then the holders of the Preferred
Stock shall have the right immediately to elect that number of
members to the Board of Directors as shall constitute a majority
of the Board of Directors.  This right to elect a majority of the
members of the Board of Directors shall continue until all
accumulated but unpaid Preferred Dividends shall have been paid
in full.

          Liquidation, Dissolution, or Winding Up.

          (a)  In the event of any liquidation, dissolution, or
winding up of the Company, whether voluntary or involuntary, the
holders of the Preferred Stock shall be entitled to be paid first
out of the assets of the Company available for distribution to
holders of the Company's capital stock of all classes and before
any sums shall be paid or any assets distributed among the
holders of shares of any other class or series of capital stock
of the Company, including Common Stock, an amount per share equal
to One Hundred Dollars ($100.00) plus the cumulative dividend as
set forth in Section 2(a) hereof whether or not declared, plus an
amount equal to all other accrued but unpaid Preferred Dividends
(the "Preference Amount").  The Preference Amount shall be
tendered to the holders of the Preferred Stock before any sums
shall be paid or any assets distributed to the holders of the
shares of any other class or series of capital stock, including
without limitation Common Stock.  If the assets of the Company
shall be insufficient to permit the payment in full to the
holders of the Preferred Stock of the amounts thus distributable,
then the entire assets of the Company available for such
distribution shall be distributed ratably among the holders of
the Preferred Stock in proportion to the preferential amount each
such holder is otherwise entitled to receive.  After such payment
shall have been made in full to the holders of the Preferred
Stock or funds necessary for such payment shall have been set
aside by the Company in trust for the account of holders of the
Preferred Stock so as to be available for such payment, holders
of the Preferred Stock shall not be entitled to participate in
the distribution of any remaining assets of the Company.

          (b)  Any consolidation, merger or a statutory share
exchange (other than a merger with a wholly-owned subsidiary of
the Company or a consolidation, merger, share exchange or other
business combination in which the outstanding voting stock of the
Company immediately prior to such consolidation, merger, share
exchange or business combination constitutes a majority of the
voting stock of the surviving entity) in which the outstanding
shares of capital stock of the Company are exchanged for
securities or other consideration of or from another corporation,
or a sale of all or substantially all the assets or stock of the
Company, shall be deemed to be a liquidation, dissolution, or
winding up of the affairs of the Company within the meaning of
this Section 3, and shall entitle the holders of the Preferred
Stock to receive on the effective date of such event the
Preference Amount, in cash, securities or other property;
provided, however, that any such event shall not be so regarded
as a liquidation, dissolution, or winding up of the affairs of
the Company with respect to the Preferred Stock if the holders of
two-thirds (2/3) of the outstanding shares of the Preferred Stock
elect not to have any such event deemed to be a liquidation,
dissolution, or winding up of the affairs of the Company by
giving written notice thereof to the Company at least ten (10)
days prior to the effective date of such event.

          (c)  Whenever the distribution provided for in this
Section 3 shall be paid in property other than cash, the value of
such distribution shall be the fair value thereof determined in
good faith by the Board of Directors of the Company.

          J\0  In the event that outstanding shares of Preferred
Stock shall be subdivided into a greater number of shares of
Preferred Stock, the Preference Amount in effect immediately
prior to each such subdivision, simultaneously with the
effectiveness of such subdivision, shall be proportionately
reduced, and, conversely, in case outstanding shares of Preferred
Stock shall be combined into a smaller number of shares of
Preferred Stock, the Preference Amount in effect immediately
prior to each such combination, simultaneously with the
effectiveness of such combination, shall be proportionately
increased.

          Voting Rights; Directors.

          (a)  Except as otherwise required by law, or as
specifically provided herein, the holders of shares of Preferred
Stock and Common Stock shall vote together as a single class on
all matters submitted to a vote of the stockholders of the
Company, with each holder of Preferred Stock entitled to that
number of votes equal to the number of shares of Common Stock
which would be issuable upon conversion of such shares of
Preferred Stock, as provided in Section 5(a) hereof (the "As
Converted Number of Shares") of such holder (with fractional
shares rounded up or down to the nearest whole number) at the
record date for the determination of stockholders entitled to
vote on such matters or, if no such record date is established,
at the date such vote is taken or any written consent of
stockholders is solicited.  The holders of the Preferred Stock
shall be entitled to notice of any stockholders' meeting in
accordance with the Bylaws of the Company.

          (b)  For so long as at least thirty-three and one-third
percent (33 1/3%) of the number of shares of Preferred Stock
issued on the Original Issue Date remain outstanding, the holders
of the Preferred Stock, voting separately as a class, shall be
entitled to elect one (1) member of the Board of Directors.  The
holders of the Preferred Stock shall vote together with holders
of the Common Stock as a single class as provided in Section 4(a)
above for the election of all other members of the Board of
Directors provided that the Board of Directors shall not consist
of more than six (6) members.

          Conversion Rights.  The holders of the Preferred Stock
shall have the following conversion rights:

          (a)  Right to Convert.  Each share of Preferred Stock
shall be convertible at any time, at the option of the holder
thereof, into such number of fully paid and nonassessable shares
of Common Stock as is determined by dividing One Hundred Dollars
($100.00) (the "Numerator") by the Conversion Price (as defined
below) in effect at the time of conversion, provided that all
shares held by such holder are so converted.  The conversion
price at which shares of Common Stock shall be deliverable upon
conversion of Preferred Stock without the payment of additional
consideration by the holder thereof (the "Conversion Price")
initially shall be six dollars ($6.00).  Such initial Conversion
Price, and the rate at which shares of Preferred Stock may be
converted into shares of Common Stock, shall be subject to
adjustment as provided below.  In the event of a liquidation of
the Company, the conversion rights shall terminate at the close
of business on the first full day preceding the date fixed for
the payment of any amounts distributable on liquidation to the
holders of Preferred Stock.

          (b)  Adjustment to Conversion Price Upon Occurrence of
Extraordinary Common Stock Event.  Upon the happening of an
Extraordinary Common Stock Event (as hereinafter defined), the
Conversion Price for the Preferred Stock, simultaneously with the
happening of such Extraordinary Common Stock Event, shall be
adjusted by multiplying the then-effective  Conversion Price by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such Extraordinary
Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after
such Extraordinary Common Stock Event, and the product so
obtained thereafter shall be the Conversion Price for the
respective series of Preferred Stock.  The Conversion Price, as
so adjusted, shall be readjusted in the same manner upon the
happening of any successive Extraordinary Common Stock Event(s). 
"Extraordinary Common Stock Event" shall mean (i) the issuance of
additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, (ii) a stock split or
subdivision of outstanding shares of Common Stock into a greater
number of shares of Common Stock, or (iii) a reverse stock split
or combination of outstanding shares of Common Stock into a
smaller number of shares of Common Stock.

          (c)  Recapitalization or Reclassification.  If the
Common Stock issuable upon the conversion of the Preferred Stock
shall be changed into the same or a different number of shares of
any class or classes of stock of the Company, whether by
recapitalization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend provided
for in Section 5(b) hereof, or a reorganization, merger, share
exchange, consolidation, or sale of assets provided for in
Section 5(d) hereof), then and in each such event the holder of
each share of Preferred Stock shall have the right thereafter to
convert such share into the kind and amount of shares of stock
and other securities and property receivable upon such
recapitalization, reclassification, or other change by holders of
the number of shares of Common Stock into which such share of
Preferred Stock might have been converted immediately prior to
such recapitalization, reclassification, or change, all subject
to further adjustment as provided herein.

          (d)  Capital Reorganization, Merger, Share Exchange,
Consolidation, or Sale of Assets.  If at any time or from time to
time there shall be a capital reorganization of the Common Stock,
including a merger, share exchange, consolidation, or sale of all
or substantially all of assets of the Company (other than a
subdivision or combination of shares or stock dividend provided
for in Section 5(b) hereof or a recapitalization or
reclassification provided for in Section 5(c) hereof), then, as a
part of such reorganization, provision shall be made so that the
holders of the Preferred Stock thereafter shall be entitled to
receive, upon conversion of each share of the Preferred Stock,
the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock into which
such shares of Preferred Stock might have been converted
immediately prior to such capital reorganization would have been
entitled to receive.  In any such case, appropriate adjustment
shall be made in the application of the provisions of this
Section 5 with respect to the rights of the holders of the
Preferred Stock after the reorganization to the end that the
provisions of this Section 5 (including adjustment of the
Conversion Price then in effect and the number of shares acquired
upon conversion of the Preferred Stock) shall be applicable after
that event in as nearly equivalent a manner as may be
practicable.  In the case of a consolidation, merger, share
exchange, or sale of all or substantially all the assets of the
Company, the provisions of Section 3(b) shall apply, and this
Section 5(d) shall not apply, unless the holders of two-thirds
(2/3) of outstanding shares of a series of Preferred Stock elect
that such event shall not be deemed to be a liquidation,
dissolution, or winding up of the affairs of the Company (such
election to be exercised by the holders of two-thirds (2/3) of
the outstanding shares of a series of Preferred Stock by
providing written notice to the Company of such election at least
ten (10) days prior to the date of such consolidation, merger,
share exchange, or sale of all or substantially all the assets of
the Company).

          (e)  Certificate as to Adjustments.  In each case of an
adjustment or readjustment of the Conversion Price of the
Preferred Stock, the Company will furnish each holder of the
Preferred Stock with a certificate prepared by the Chief
Financial Officer of the Company showing such adjustment or
readjustment and stating in detail the facts upon which such
adjustment or readjustment is based.

          (f)  Exercise of Conversion Privilege.  To exercise its
conversion privilege, a holder of Preferred Stock shall surrender
the certificate(s) representing the shares being converted to the
Company at its principal office, accompanied by written notice to
the Company at that office that such stockholder elects to
convert such shares (a "Conversion Notice").  The Conversion
Notice also shall state the name(s) and address(es) in which the
certificate(s) for shares of Common Stock issuable upon such
conversion shall be issued.  The certificate(s) for shares of
Preferred Stock surrendered for conversion shall be accompanied
by proper assignment thereof to the Company or in blank.  The
date when the Conversion Notice is received by the Company
together with the certificate(s) representing the shares of
Preferred Stock being converted shall be the "Conversion Date." 
As promptly as practicable after the Conversion Date, the Company
shall issue and deliver to the holder of the shares of Preferred
Stock being converted, or on its written order, such
certificate(s) as it may request of the number of whole shares of
Common Stock issuable upon the conversion of such shares of
Preferred Stock in accordance with the provisions of this
Section 5 and cash, as provided in Section 5(g), in respect of
any fraction of a share of Common Stock issuable upon such
conversion.  Such conversion shall be deemed to have been
effected immediately prior to the close of business on the
Conversion Date, and at such time the rights of the holder as a
holder of the converted shares of Preferred Stock shall cease and
the person(s) in whose name(s) any certificate(s) for shares of
Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder(s) of record of the shares of
Common Stock represented thereby.

          (g)  Cash in Lieu of Fractional Shares.  No fractional
shares of Common Stock or scrip representing fractional shares
shall be issued upon the conversion of shares of Preferred Stock. 
Instead of any fractional shares of Common Stock that otherwise
would be issuable upon conversion of a series of Preferred Stock,
the Company shall pay to the holder of the shares of Preferred
Stock that were converted a cash adjustment in respect of such
fractional shares in an amount equal to the same fraction of the
Fair Market Value price per share of the Common Stock at the
close of business on the Conversion Date.  "Fair Market Value"
shall mean (i) in the case of a security listed or admitted to
trading on any securities exchange, the last reported sale price,
regular way (as determined in accordance with the practices of
such exchange), on such day, or if no sale takes place on such
day, the average of the closing bid and asked prices on such day
(and in the case of a security traded on more than one national
securities exchange, at such price or such average, upon the
exchange on which the volume of trading during the last calendar
year was the greatest), (ii) in the case of a security not then
listed or admitted to trading on any securities exchange, the
last reported sale price on such day, or if no sale takes place
on such day, the average of the closing bid and asked prices on
such day, as reported by a reputable quotation service designated
by the Company, (iii) in the case of a security not then listed
or admitted to trading on any securities exchange and as to which
no such reported sale price or bid and asked prices are
available, the average of the reported high bid and low asked
prices on such day, as reported by a reputable quotation service,
or the Wall Street Journal, or if there are no bids and asked
prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than
30 days prior to the date in question) for which prices have been
so reported, and (iv) in the case of a security determined by the
Company's Board of Directors as not having an active quoted
market or in the case of other property, such fair market value
as shall be determined by the Board of Directors.  The
determination as to whether any fractional shares are issuable
shall be based upon the total number of shares of Preferred Stock
being converted at any one time by any holder thereof, not upon
each share of Preferred Stock being converted.

          (h)  Reservation of Common Stock.  The Company at all
times shall reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Preferred Stock,
such number of its shares of Common Stock as from time to time
shall be sufficient to effect the conversion of all outstanding
shares of the Preferred Stock, and if at any time the number of
authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding
shares of the Preferred Stock, the Company shall take such
corporate action as may be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.

          (i)  Special Adjustment of Conversion Price.   In the
event that the Company enters into a written agreement with the
United Kingdom Ministry of Defense prior to July 31, 1997,
providing for payments to the Company of $19,000,000, then the
Conversion Price shall automatically, be adjusted to $7.50,
subject to further adjustment as set forth in Section 5.

          Restrictions and Limitations.

          (a)  Voting as a Class.  So long as any shares of
Preferred Stock remain outstanding, the Company will not take any
of the following actions without the affirmative vote or consent
(with each share of Preferred Stock being entitled to one vote)
of the holders of at least a majority of the outstanding shares
of the Preferred Stock, given in writing or by resolution adopted
at a meeting called for such purpose:

               (i)  redeem, purchase or otherwise acquire for
     value (or pay into or set aside for a sinking fund for such
     purpose) any share or shares of Preferred Stock otherwise
     than by redemption of Preferred Stock in accordance with
     Section 7 hereof or by conversion in accordance with
     Section 5 hereof;

               (ii)  redeem, purchase or otherwise acquire (or
     pay into or set aside for a sinking fund for such purpose)
     any of the Common Stock, except for (A) the purchase of
     rights to exercisable options under the Company's 1988
     Incentive Stock Option Plan in an amount not to exceed the
     difference between the exercise price of such option and the
     Fair Market Value of the Common Stock on the date of
     purchase by the Company, or (B) the purchase of the warrant
     for 100,000 shares of Common Stock held by Chase Manhattan
     Capital Corporation, for an amount not to exceed $375,000; 

               (iii)  authorize or issue, or obligate itself to
     issue, any other equity security senior to or on a parity
     with the Preferred Stock as to dividend rights or redemption
     rights or liquidation preferences;

               (iv)  consolidate or merge with (other than a
     merger with a wholly-owned subsidiary of the Company or a
     consolidation, merger, share exchange or other business
     combination in which the outstanding voting stock of the
     Company immediately prior to such consolidation, merger,
     share exchange or business combination constitutes a
     majority of the voting stock of the surviving entity) or
     into, or sell or license all or substantially all the assets
     of the Company to, any other person or entity, liquidate,
     dissolve, or wind-up the affairs of the Company,
     recapitalize the outstanding capital stock of the Company,
     or reorganize the affairs of the Company;

               (v)  increase or decrease (other than by
     redemption or conversion) the total number of authorized
     shares of Preferred Stock; or

               (vi)  effect an exchange, reclassification or
     cancellation of all or part of the shares of Preferred Stock
     or Common Stock, or effect an exchange, or create a right of
     exchange, of all or part of the shares of another class or
     series into the shares of Preferred Stock or Common Stock,
     whether in securities of the Company or another corporation.

          (b)  Voting by Series of Preferred Stock.  The Company
shall not amend its Articles of Incorporation or Bylaws without
the approval of the holders of a majority of the outstanding
shares of Preferred Stock if such amendment would:

               (i)  reduce the dividend rates on the Preferred
     Stock provided for herein, make such dividends
     noncumulative, defer the date from which dividends will
     accrue, cancel accrued and unpaid dividends, or change the
     relative seniority rights of the holders of the Preferred
     Stock as to the payment of dividends in relation to the
     holders of any other capital stock of the Company;

               (ii)  reduce the amount payable to the holders of
     the Preferred Stock upon the voluntary or involuntary
     liquidation, dissolution or winding up of the Company, or
     change the relative seniority of the liquidation preferences
     of the holders of the Preferred Stock;

               (iii)  reduce the Redemption Price specified in
     Section 7 hereof with respect to such series;

               (iv)  delay any of the Redemption Dates provided
     for in Section 7 hereof;

               (v)  cancel or modify the conversion rights of the
     Preferred Stock provided for in Section 5 hereof; or 

               (vi)  otherwise amend its Articles of
     Incorporation if such amendment would change adversely any
     of the rights, preferences or privileges provided for 
     herein for the benefit of any shares of Preferred Stock. 

     Redemption.

          (a)  Preferred Stock Right of Redemption; Automatic
Conversion.  The Company shall redeem, from any source of funds
legally available therefor, the Preferred Stock of each holder
thereof in three (3) annual installments beginning on the fifth
(5th) anniversary of the Original Issue Date (each a "Redemption
Date"), unless such holder has elected to waive its right of
redemption as provided herein.  The Company shall effect this
redemption by paying in cash to each such holder for each share
of Preferred Stock a sum equal to One Hundred Dollars ($100.00)
per share (as adjusted for any stock dividends, combinations, or
splits with respect to such shares), plus an amount equal to all
accumulated but unpaid dividends for the shares to be redeemed
(the "Redemption Price").  A holder of Preferred Stock may elect,
by written notice delivered to the Company not less than
twenty-one (21) days prior to the Redemption Date, to waive its
right to have redeemed all (but not less than all) of the shares 
of Preferred Stock held by such holder which are eligible to be
redeemed on such Redemption Date, provided that on such
Redemption Date each such share of Preferred Stock which is not
redeemed shall be converted automatically into shares of Common
Stock at the Conversion Price then in effect on such Redemption
Date.  The number of shares of Preferred Stock that the Company
shall be required under this Section 7(a) to redeem on each
Redemption Date shall be 8,333 shares, except that the Company
shall be required to redeem all the shares of Preferred Stock
outstanding on the seventh (7th) anniversary of the Original
Issue Date.  Any redemption shall be made on a pro rata basis
among the holders of the Preferred Stock in proportion to the
shares of such series of Preferred Stock then held by them. 

          (b)  Redemption at the Option of the Company.  The
Preferred Stock may not be repurchased by the Company at the
option of the Company at any time prior to the second anniversary
of the Original Issue date.  Notwithstanding anything herein to
the contrary, on and after the second anniversary of the Original
Issue Date, the Preferred Stock shall be subject to redemption,
at the  option of the Company, in whole or in part, at any time
or from time to time (a "Called Redemption Date"), provided that
the average bid price for the Common Stock has been greater than
$9.50 per share during the twenty (20) business days prior to the
date of the Redemption Notice (as defined below).  The procedure
for the redemption or repurchase of the Preferred Stock by the
Company pursuant to the provisions of this Section 7(b) shall be
as set forth in Section 7(c) below.

          (c)  Procedures for Redemption of Preferred Stock.  At
least thirty (30) days but not more than forty-five (45) days
prior to each Redemption Date the Company shall mail a written
notice, first class postage prepaid, to each holder of record at
the close of business on the business day preceding the day on
which notice is given, of the Preferred Stock to be redeemed, at
the address last shown on the records of the Company for such
holder, notifying such holder of the redemption to be effected,
specifying (i) the number of shares to be redeemed from such
holder, (ii) the Redemption Date, (iii) the Redemption Price,
(iv) the place at which payment may be obtained, (v) advising
such holder of its right to elect to waive its right to have all
(but not less than all) such shares redeemed and that, if such
election is made, such shares of Preferred Stock which are not
redeemed shall be converted automatically into shares of Common
Stock at the Conversion Price then in effect (setting forth such
Conversion Price), and (vi) calling upon such holder to surrender
to the Company, in the manner and at the place designated, its
certificate or certificates representing the shares to be
redeemed (the "Redemption Notice").  On or after the Redemption
Date, each holder of Preferred Stock to be redeemed shall
surrender to the Company the certificate or certificates
representing such shares, in the manner and at the place
designated in the Redemption Notice, and thereupon the Redemption
Price of such shares shall be payable to the order of the person
whose name appears on such certificate or certificates as the
owner thereof and each surrendered certificate shall be canceled. 
In the event less than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.  From and after each
Redemption Date, unless there shall have been a default in
payment of the Redemption Price, any shares of Preferred Stock
redeemed on such Redemption Date shall not be entitled to any
further rights as Preferred Stock and shall not be deemed
outstanding for any purpose.  If the funds of the Company legally
available for redemption of shares of Preferred Stock on any
Redemption Date are insufficient to redeem the total number of
shares of Preferred Stock to be redeemed on such date, those
funds which are legally available will be used to redeem the
maximum possible number of such shares ratably among the holders
of such shares to be redeemed based upon the number of shares of
Preferred Stock held by each such holder.  The shares of
Preferred Stock not redeemed shall remain outstanding and
entitled to all the rights and preferences provided herein.  At
any time thereafter when additional funds of the Company are
legally available for the redemption of shares of Preferred Stock
such funds will be used immediately to redeem the balance of the
shares which the Company has become obliged to redeem on any
Redemption Date, but which it has not redeemed, it being
understood that any such redemption shall not constitute a waiver
by a holder of Preferred Stock of any rights derived from the
failure to redeem on the Redemption Date.

     No Reissuance of Convertible Preferred Stock.  No share(s)
of Preferred Stock acquired by the Company by reason of
redemption, purchase, conversion, or otherwise shall be reissued,
and all such shares shall be canceled, retired, and eliminated
from the shares that the Company shall be authorized to issue. 
The Company from time to time may take such appropriate corporate
action as may be necessary to reduce the authorized number of
shares of the Preferred Stock accordingly.

     No Dilution or Impairment.  The Company will not, by
amendment of its Articles of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, share
exchange, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of the Preferred Stock set forth
herein, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the
rights of the holders of the Preferred Stock against dilution or
other impairment.

          Notices of Record Date.  In the event of any:

          (a)  taking by the Company of a record of the holders
of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase, or
otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or

          (b)  capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company, any merger, consolidation, or share exchange of the
Company, or any transfer of all or substantially all the assets
of the Company to any other corporation, or any other entity or
person; or

          (c)  voluntary or involuntary dissolution, liquidation,
or winding up the Company;

then and in each such event the Company shall mail or cause to be
mailed to each holder of Preferred Stock a notice specifying
(i) the record date for such dividend, distribution, or right and
a description of such dividend, distribution, or right, (ii) the
date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, share
exchange, dissolution, liquidation, or winding up is expected to
become effective, and (iii) the time, if any, that is to be fixed
as to when the holders of record of Common Stock (or other
securities) shall be entitled to exchange their shares of Common
Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, share
exchange, dissolution, liquidation, or winding up.  Such notice
shall be mailed at least ten (10) days prior to the date
specified in such notice on which such action is to be taken.